In addition to the APR (annual percentage rate) and the
finance charges, most credit cards have a number of 'fees' associated
with their use. Some fees are unavoidable with a particular card (like
an annual fee or a program participation fee), while others are triggered
by certain circumstances. The most common fees are listed below. To get
a better idea of what your credit card may cost to use over the course
of a year, check your card's terms and conditions and your user agreement
to see which fees may apply to you.
An annual fee is charged for the privilege of having the card, whether
you ever use it or not. Many credit cards offer no annual fee and
a low interest rate to their best customers, or to those with excellent
credit. If you're trying to recover from a bout with bad credit,
your only choice may be a card with a relatively high annual fee.
In that case, look for one with the lowest APR you can get, and
be careful to avoid triggering other fees.
When you use your credit card to get a cash advance, there is often
a cash advance fee. It may be a flat fee per cash advance (say $5,
no matter how much cash you borrow), or a percentage of the amount
advanced - 5%. This fee is in addition to interest that you will
pay on the amount.
Cash advance fee.
Usually, when you transfer the balance of one card to another, the
credit card company will charge you a balance transfer fee. Like
the cash advance fee, it may be a flat rate, or a percentage of
the amount of the transfer.
Balance transfer fee.
Late payment fee.
If your payment is not received and posted by your credit card company
after the due date, you will be charged a late payment fee. The late payment
fee will be added to your credit card balance. In many cases, if you are
late with a payment more than once, or a certain number of times within
a specified period, your interest rate will also rise in addition to the
late payment fee.
Over the credit limit fee.
If you go over your credit limit on your credit card, you will often be
charged a flat fee in penalty.
Credit limit increase fee.
You usually must pay a credit limit increase fee if you request that your
credit limit be raised.
Set up fee.
When you open a new credit card account, the credit card company may charge
a one-time setup fee which may be anything from $19 to $149.
Return item fee.
This is essentially a bounced check fee. If you make a payment on your
account by check, and the check is returned by your bank for non-sufficient
funds, the credit card company may charge you a returned-check fee.
Depending on the credit card company, and the card offered, you may be
liable for other fees, including fees for making payments by phone, for
checking your account online, for establishing an online bill paying service
or for providing other customer service. Be sure to read your credit card's
terms and conditions to see what charges and fees you're liable for paying.